A record 32% of electricity generated in the National Electricity Market (NEM) in Q3 came from renewable energy sources, the Clean Energy Regulator's latest Quarterly Carbon Market Report (QCMR) shows.
This means that across 2021, renewables will likely contribute 30% of all NEM generation, double the 15% renewable energy delivered to the market in 2017.
Since 2018, an average of 6 gigawatts of additional renewable energy capacity has been added to Australia's grid each year. The Clean Energy Regulator expects a similar level of new capacity will continue to be added in the next year.
Rooftop solar is leading the way with another 3.2 gigawatts of added capacity expected in 2021, despite extended lockdowns in NSW and VIC which inhibited rooftop solar installations.
Clean Energy Regulator Chair, David Parker, said with a total capacity to generate 15.6 gigawatts of electricity rooftop solar is now Australia's largest virtual power station.
"This last quarter also saw a very strong result for final investment decisions in large-scale renewable energy with 1.11 gigawatts of new capacity announced.
"This is an important lead indicator that we can expect to see many new large-scale renewable energy power stations being constructed around the country," he said.
Mr Parker said all the lead indicators are strong for a big reduction of emissions going into 2022.
"By one estimate is that the Renewable Energy Target and Emissions Reduction Fund (ERF) will reduce Australia's emissions by 57 million tonnes.
"However, a less conservative approach suggests Australia's emissions will decline by as much as 75 million tonnes in 2021 given the thermal generation that will be displaced by the additional renewable energy," he said.
Voluntary carbon markets continue to undergo rapid growth as more and more companies set emissions reduction targets. Total Australian carbon unit and certificate cancellations for 2021 are 2.7 million, up 24% year on year at the end of Q3. The ACT government cancellation of 2.2 million LGCs is an addition to this.
Voluntary market information will become more available now that companies can publicly show their net emissions position by opting-in to the Corporate Emissions Reduction Transparency Report.
Mr Parker said a strong Q3 saw 4.8 million Australian carbon credit units issued.
"It's likely the number of ACCUs issued in 2021 will reach a record 17.3 million units, outstripping expectations and well up from the 16 million last year.
"Several milestones were also achieved in the quarter - the 1000th ERF project was registered and total ACCUs issued since the scheme began reached over 100 million - solid indicators the ACCU market scaling up," he said.
In Q3, the Clean Energy Regulator registered 54 ERF projects, bringing the total to 145 for the year. This is a 67% increase on the same period last year with soil carbon project registrations driving the increase.
